DTSQ 10-Q
DT Cloud Star Acquisition Corp (DTSQ)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ________ to ________
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(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code
N/A
(Former name or former address, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) |
Name of each exchange on which registered | ||
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |
| ☒ | Smaller reporting company | |||
| Emerging growth company |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of June 30, 2026, there were ordinary shares, par value $ per share, issued and outstanding.
DT CLOUD STAR ACQUISITION CORPORATION
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DT CLOUD STAR ACQUISITION CORPORATION
BALANCE SHEETS
| June 30, 2026 | December 31, 2025 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash | $ | $ | ||||||
| Prepaid expenses | ||||||||
| Total current assets | ||||||||
| Cash and marketable securities held in trust | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accrued expenses | $ | $ | ||||||
| Amount due to Sponsor | ||||||||
| Total Current Liabilities | ||||||||
| Deferred underwriting compensation | ||||||||
| TOTAL LIABILITIES | $ | $ | ||||||
| Commitments and contingencies (Note 7) | ||||||||
| Ordinary shares subject to possible redemption, shares (at redemption price of $ and $ per share) at June 30, 2026 and December 31, 2025, respectively | ||||||||
| Shareholders’ deficit: | ||||||||
| Ordinary shares, par value $ per share; shares authorized; and shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Share capital receivable | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Shareholders’ deficit | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT | $ | $ | ||||||
See accompanying notes to the unaudited financial statements.
| 1 |
DT CLOUD STAR ACQUISITION CORPORATION
UNAUDITED STATEMENTS OF OPERATIONS
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Operating expenses: | ||||||||||||||||
| Formation and operating costs | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income: | ||||||||||||||||
| Interest from operating account | ||||||||||||||||
| Interest earned in Trust Account | ||||||||||||||||
| Unrealized gain on marketable securities held in Trust Account | ||||||||||||||||
| Total other income | ||||||||||||||||
| Net income (loss) | $ | $ | $ | ( | ) | $ | ||||||||||
| Basic and diluted weighted average shares outstanding | ||||||||||||||||
| Redeemable ordinary shares, basic and diluted | ||||||||||||||||
| Non-redeemable ordinary shares, basic and diluted(1) | ||||||||||||||||
| Redeemable ordinary shares, basic and diluted net income per share | ||||||||||||||||
| Non-redeemable ordinary shares, basic and diluted net income (loss) per share | ) | ) | ) | ) | ||||||||||||
See accompanying notes to unaudited financial statements.
| 2 |
DT CLOUD STAR ACQUISITION CORPORATION
UNAUDITED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
| For the Six Months Ended June 30, 2026 | ||||||||||||||||||||
| Ordinary Shares | Additional Paid-in | Accumulated | Total Shareholders’ Equity | |||||||||||||||||
| Shares | Amount | Capital | Deficit | (Deficit) | ||||||||||||||||
| Balance as of December 31, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Subsequent measurement of ordinary shares subject to possible redemption (interest earned and unrealized gain on Trust Account) | - | ( | ) | ( | ) | |||||||||||||||
| Subsequent measurement of ordinary shares subject to possible redemption (additional funding for business combination extension) | - | ( | ) | ( | ) | |||||||||||||||
| Net income for the period | - | ( | ) | ( | ) | |||||||||||||||
| Balance as of March 31, 2026 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Subsequent measurement of ordinary shares subject to possible redemption (interest earned and unrealized gain onTrust Account) | - | ( | ) | ( | ) | |||||||||||||||
| Subsequent measurement of ordinary shares subject to possible redemption (additional funding for business combination extension) | - | |||||||||||||||||||
| Net income for the period | - | |||||||||||||||||||
| Balance as of June 30, 2026 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| For the Six Months Ended June 30, 2025 | ||||||||||||||||||||
| Ordinary Shares | Additional Paid-in | Accumulated | Total Shareholders’ Equity | |||||||||||||||||
| Shares | Amount | Capital | Deficit | (Deficit) | ||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Subsequent measurement of ordinary shares subject to possible redemption (interest earned and unrealized gain on Trust Account) | ( | ) | ( | ) | ||||||||||||||||
| Net income for the period | - | |||||||||||||||||||
| Balance as of March 31, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Subsequent measurement of ordinary shares subject to possible redemption (interest earned and unrealized gain on Trust Account) | ( | ) | ( | ) | ||||||||||||||||
| Net income for the period | ||||||||||||||||||||
| Balance as of June 30, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
See accompanying notes to unaudited financial statements.
| 3 |
DT CLOUD STAR ACQUISITION CORPORATION
UNAUDITED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Amortization of prepaid expenses | ||||||||
| Interest income earned in cash and investments held in Trust Account | ( | ) | ( | ) | ||||
| Change in operating assets and liabilities: | ||||||||
| Prepaid expenses | ( | ) | ( | ) | ||||
| Amount due to sponsor | ( | ) | ||||||
| Deferred offering costs | ||||||||
| Accrued liabilities | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Extension contributions deposited into Trust Account | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||
| Proceeds from promissory note - related party | ||||||||
| Net cash provided by financing activities | ||||||||
| NET CHANGE IN CASH | ( | ) | ( | ) | ||||
| CASH, BEGINNING OF PERIOD | ||||||||
| CASH, END OF PERIOD | $ | $ | ||||||
| Supplemental Cash Flow Information: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for income taxes | $ | $ | ||||||
See accompanying notes to unaudited financial statements.
| 4 |
DT CLOUD STAR ACQUISITION CORPORATION
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND BUSINESS BACKGROUND
DT Cloud Star Acquisition Corporation (the “Company”) is a blank check company. It was incorporated as a Cayman Islands exempted company on November 29, 2022, with the original name of Infinity Star Acquisition Corporation at inception. The name was changed to DT Cloud Star Acquisition Corporation on January 31, 2024. The Company was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses (the “Business Combination”). The Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination.
The Company is an early-stage company and emerging growth company and, as such, the Company is subject to all of the risks associated with early-stage companies and emerging growth companies. The Company has selected December 31 as its fiscal year end.
The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering.
The
registration statement for the Company’s Initial Public Offering was declared effective on July 24, 2024. On July 26, 2024, the
Company consummated the Initial Public Offering of units (the “Public Units”), which includes Public Units
upon the full exercise by the underwriter of its over-allotment option, at $ per Public Unit, generating gross proceeds of $
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the sale of units (the “Private Placement Units”)
at a price of $ per Private Placement Unit in a private placement to DT Cloud Star Management Limited (the “Sponsor”),
generating gross proceeds of $
Transaction
costs amounted to $
Trust Account
Following
the closing of the Initial Public Offering, the aggregate amount of $
Interest income is recognized for earnings generated from all debt instruments in trust including U.S. Treasury money market funds, treasury bills and cash deposits irrespective of custodian’s description of periodic distribution as dividend. Dividend income is only recognized upon cash distribution declared on equity instruments, equity ETF and REITs. Interest and dividend derived from trust investments shall be separately disclosed either on Statement of Operations or accompanying footnotes per Regulation S-X Rule 5-03.
On
October 22, 2025, the Company entered into an amendment to the Investment Management Trust Agreement (the “Trust Agreement”),
with Wilmington Trust National Association. Pursuant to the Trust Agreement, the Company has the right to extend the time for us to
complete our initial business combination for a period for 12 months from October 26, 2025 to October 26, 2026 by depositing into the
trust account $
The
balances in the Trust Account as of June 30, 2026 and December 31, 2025 were $
| 5 |
DT CLOUD STAR ACQUISITION CORPORATION
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Business Combination
The
Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering
and sale of the Private Placement Units, although substantially all of the net proceeds are intended to be applied generally toward consummating
a Business Combination. Nasdaq rules provide that the Business Combination must be with one or more target businesses that together have
a fair market value equal to at least
The Company will provide its shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of a Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer. In connection with an initial Business Combination, the Company may seek shareholder approval of a Business Combination at a meeting called for such purpose at which shareholders may seek to redeem their shares, regardless of whether they vote for or against a Business Combination.
Notwithstanding
the foregoing, if the Company seeks shareholder approval of a Business Combination and it does not conduct redemptions pursuant to the
tender offer rules, the Company’s Amended and Restated Memorandum and Articles of Association provides that a public shareholder,
together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group”
(as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted
from seeking redemption rights with respect to
If a shareholder vote is not required and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association, offer such redemption pursuant to the tender offer rules of the Securities and Exchange Commission (“SEC”), and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination.
The shareholders will be entitled to redeem their public shares for a pro rata portion of the amount then in the Trust Account (initially $ per public share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). The per-share amount to be distributed to shareholders who redeem their public shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriter (as discussed in Note 7). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s rights. The ordinary shares will be recorded at redemption value and classified as temporary equity upon the completion of the Initial Public Offering, in accordance with Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.”
The Company will proceed with a Business Combination if the Company seeks shareholder approval, a majority of the outstanding shares voted are voted in favor of the Business Combination. If a shareholder vote is not required and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association, offer such redemption pursuant to the tender offer rules of the SEC, and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination.
| 6 |
DT CLOUD STAR ACQUISITION CORPORATION
NOTES TO UNAUDITED FINANCIAL STATEMENTS
The Sponsor and any of the Company’s officers or directors that may hold Founder Shares (as described in Note 5) (as defined the “initial shareholders”) are identical to the ordinary shares included in the units being sold in this offering except that the founder shares are subject to certain transfer restrictions, as described in more detail below: the sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed (i) to waive their redemption rights with respect to their founder shares, private placement shares and public shares in connection with the completion of the initial business combination, (ii) to waive their redemption rights with respect to any founder shares, private placement shares and public shares held by them in connection with a shareholder vote to approve an amendment to the amended and restated memorandum and articles of association (A) to modify the substance or timing of obligation to provide for the redemption of public shares in connection with an initial business combination or to redeem % of public shares if the Company have not consummated the initial business combination within the timeframe set forth therein or (B) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity and (iii) to waive their rights to liquidating distributions from the Trust Account with respect to their founder shares and private placement shares if the Company fail to complete the initial business combination within 15 months from the closing of this offering (although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold if the Company fail to complete the initial business combination within the prescribed time frame).
On
October 22, 2025, the Company entered into an amendment (the “Trust Amendment”) to the Investment Management Trust Agreement
(the “Trust Agreement”), with Wilmington Trust National Association. Pursuant to the Trust Amendment, the Company has the
right to extend the time for it to complete its Business Combination (the “Combination Period”) under the Trust Agreement
for a period for 12 months from October 26, 2025 to October 26, 2026 by depositing into the Trust Account $
If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter, redeem % of the outstanding Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned (net of taxes payable), which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and the Company’s board of directors, proceed to commence a voluntary liquidation and thereby a formal dissolution of the Company, subject in each case to its obligations to provide for claims of creditors and the requirements of applicable law. The underwriters have agreed to waive its rights to the deferred underwriting commission held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than $.
The Sponsor has agreed that it will be liable to the Company, if and to the extent any claims by a vendor for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amounts in the Trust Account to below $ per share (whether or not the underwriters’ over-allotment option is exercised in full), except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of the “Proposed Public Offering” against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). In the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
On February 2, 2026, the Company entered into a Business Combination Agreement (the “BCA”) with DTSQ Purchaser Inc., a Delaware corporation and our wholly owned subsidiary (“Purchaser”), DTSQ Merger Sub Inc., a Delaware corporation and our wholly owned subsidiary (“Merger Sub”), and PrimeGen US, Inc., a Delaware corporation (the “Target”). Pursuant to the BCA, subject to the terms and conditions set forth therein, at the closing of the transactions contemplated by the BCA (the “Closing”), (i) the Company shall merge with and into the Purchaser (the “Redomestication Merger”), with Purchaser surviving the Redomestication Merger; and (ii) at least one business day subsequent to the consummation of the Redomestication Merger, Merger Sub shall merge with and into the Company (the “Acquisition Merger” and together with the Redomestication Merger, the “Mergers”), with the Target surviving the Acquisition Merger (the “Surviving Corporation”). As of the date of issuance of these financial statements, the business combination contemplated by the BCA has not been consummated.
| 7 |
DT CLOUD STAR ACQUISITION CORPORATION
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Pursuant
to the BCA, (a) at the effective time of Redomestication Merger (the “Redomestication Merger Effective Time”), (i) all the
issued and outstanding units of DT Cloud Star (the “Parent Units”) immediately prior to the Redomestication Merger Effective
Time will separate into their individual components of the ordinary share of DT Cloud Star (the “Parent Ordinary Share”)
and the rights of DT Cloud Star (the “Parent Rights”) and will cease separate existence and trading, and (ii) each issued
and outstanding Parent Right immediately prior to the Redomestication Merger Effective Time shall be converted into one right of the
Purchaser to receive one-ninth (1/9) of one share of Class A common stock of the Purchaser (the “Purchaser Class A Common Stock”);
(b) at the Redomestication Merger Effective Time, each issued and outstanding Parent Ordinary Share, other than certain excluded shares
and dissenting shares, immediately prior to the Redomestication Merger Effective Time shall be converted automatically into one share
of Purchaser Class A Common Stock; and (c) at the Redomestication Merger Effective Time, Purchaser shall issue warrants to purchase a
total of an additional
At
the effective time of the Acquisition Merger (the “Acquisition Merger Effective Time”), Purchaser will issue to Company stockholders
an aggregate number of Purchaser Class A Common Stock valued at the “Purchase Price,” calculated as (a) $
Liquidity and Capital Resources
On
July 26, 2024, we consummated the initial public offering of Units, which includes the exercise in full by the underwriters
of their over-allotment option to purchase up to an additional Units on July 25, 2024. The Units were sold at an offering price
of $ per Unit, generating gross proceeds of $
Following our initial public offering and the private placement, a total of $ of the net proceeds were deposited in the trust account. We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account (excluding deferred underwriting commissions and less taxes payable) to complete our initial business combination. We may withdraw interest from the trust account to pay our taxes. To the extent that our equity or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies. We intend to use the funds held outside the trust account primarily for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the business combination.
For
the six months ended June 30, 2026, cash used in operating activities was $
On
June 30, 2026, the Company had working capital deficit of $
In order to fund working capital deficiencies or finance transaction costs in connection with an initial business combination, our sponsor, officers, directors, or their affiliates may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we will repay such loaned amounts. In the event that the initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts, but no proceeds from our trust account would be used for such repayment.
On
October 28, 2024, we issued an unsecured promissory note to the sponsor, pursuant to which we may borrow up to an aggregate principal
amount of $
| 8 |
DT CLOUD STAR ACQUISITION CORPORATION
NOTES TO UNAUDITED FINANCIAL STATEMENTS
On February 2, 2026, we entered into a Business Combination Agreement (the “BCA”) with PrimeGen US, Inc. and certain other parties, pursuant to which we intend to consummate our initial business combination through a series of merger transactions. Management believes that the consummation of the proposed business combination, if completed, would provide us with an operating business and additional capital resources. However, the completion of the proposed business combination is subject to customary closing conditions, including regulatory approvals and shareholder approval, and there can be no assurance that the transaction will be consummated. Accordingly, the matters described above do not alleviate the substantial doubt about our ability to continue as a going concern.
Additionally, during the shareholder meeting, a total of shares of common stock were tendered for redemption. This redemption of public shares resulted in a significant reduction in the number of outstanding public shares and has impacted the Company’s available liquidity. Management is actively managing the Company’s cash resources to ensure that sufficient funds are available to meet the minimum cash condition required to consummate the business combination.
The redemption of public shares, together with the extension of the business combination deadline, provides the Company with additional time to pursue suitable acquisition targets. However, the redemption activity has reduced the amount of cash available outside of the Trust Account, and any further redemptions could further impact the Company’s liquidity position and its ability to consummate the business combination. To support its ongoing liquidity needs and fund operating and transaction-related expenses, the Company plans to issue additional promissory notes to the Sponsor or its affiliates, subject to mutually agreed terms. The Company will continue to closely monitor its liquidity position and take appropriate actions to ensure that it maintains sufficient capital resources to complete the business combination.
Going Concern Consideration and Management Liquidity Plans
The Company initially has 15 months from the consummation of the Initial Public Offering to consummate the initial Business Combination. If the Company does not complete a Business Combination within 15 months from the consummation of the Initial Public Offering, the Company will trigger an automatic winding up, dissolution and liquidation pursuant to the terms of the Amended and Restated Memorandum and Articles of Association. As a result, this has the same effect as if the Company had formally gone through a voluntary liquidation procedure under the Companies Act (As Revised) of the Cayman Islands. Accordingly, no vote would be required from our shareholders to commence such a voluntary winding up, dissolution and liquidation.
On
October 22, 2025, the Company entered into an amendment (the “Trust Amendment”) to the Investment Management Trust Agreement
(the “Trust Agreement”), with Wilmington Trust National Association. Pursuant to the Trust Amendment, the Company has the
right to extend the time for it to complete its Business Combination (the “Combination Period”) under the Trust Agreement
for a period for 12 months from October 26, 2025 to October 26, 2026 by depositing into the Trust Account $
If the Company is unable to consummate the Company’s initial Business Combination by October 26, 2026 (unless further extended), the Company will, as promptly as possible but not more than ten business days thereafter, redeem % of the Company’s outstanding public shares for a pro rata portion of the funds held in the Trust Account, including a pro rata portion of any interest earned on the funds held in the Trust Account and not necessary to pay taxes, and then seek to liquidate and dissolve. However, the Company may not be able to distribute such amounts as a result of claims of creditors which may take priority over the claims of the Company’s public shareholders. In the event of dissolution and liquidation, the Company’s rights will expire and will be worthless.
In
connection with the Company’s assessment of going concern considerations in accordance with Accounting Standards Update
(“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going
Concern,” management has determined that if the Company is unsuccessful in consummating an initial business combination within
the prescribed period of time from the closing of the IPO, the requirement that the Company cease all operations, redeem the public
shares and thereafter liquidate and dissolve raises substantial doubt about the ability to continue as a going concern. On October
28, 2024, the Company issued an unsecured promissory note to the sponsor, pursuant to which the Company may borrow up to an
aggregate principal amount of $
As indicated in the accompanying financial statements, the Company currently has a positive working capital, but projected expenses are beyond the cash available through the earlier of the consummation of the initial Business Combination or one year from the issuance date of this financial statements. There is no assurance that the Company’s plan to consummate a business combination will be successful. If a Business Combination is not consummated by the relevant period, there will be a mandatory liquidation and subsequent dissolution. As a result, there is substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. The financial statement does not include any adjustments that might result from the outcome of the uncertainty.
| 9 |
DT CLOUD STAR ACQUISITION CORPORATION
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
These accompanying financial statements have been prepared in accordance with U.S. GAAP and pursuant to the rules and regulations of the SEC.
The accompanying unaudited financial statements as of June 30, 2026, and for the three and six months ended June 30, 2026 have been prepared in accordance with U.S. GAAP for interim financial information and Article 8 of Regulation S-X. In the opinion of management, all adjustments considered for a fair presentation have been included. Operating results for the three and six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the period ending December 31, 2026, or any future period.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s unaudited financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
| 10 |
DT CLOUD STAR ACQUISITION CORPORATION
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Cash and Cash Equivalents
The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
The Company had $
Marketable Securities Held in Trust Account
The
Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance
sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held
in Trust Account are included in interest earned and in unrealized gains on marketable securities held in Trust Account, in the accompanying
statements of operations. The estimated fair values of investments held in Trust Account are determined using available market information.
The Company had $
During
the three and six months ended June 30, 2026, interest earned in the Trust Account amounted to $
Offering Costs Associated with the Initial Public Offering
The Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A – “Expenses of Offering”. Offering costs consisted of legal, accounting, and other costs incurred that were directly related to the Initial Public Offering. Upon completion of the Initial Public Offering, offering costs were allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs allocated to the Rights were charged to the shareholders’ equity. Offering costs allocated to the ordinary shares were charged against the carrying value of ordinary shares subject to possible redemption upon the completion of the Initial Public Offering.
The Company accounts for its ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, as of June 30, 2026, ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet.
The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid-in capital and accumulated deficit if additional paid in capital equals to zero. The interest earned by the marketable security held in trust, and the extension fee invest into the marketable security held in trust, were also recognized in redemption value against additional paid-in capital and accumulated deficit immediately.
| 11 |
DT CLOUD STAR ACQUISITION CORPORATION
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Income Taxes
Income taxes are determined in accordance with the provisions of Accounting Standards Codification Topic 740, “Income Taxes” (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
ASC
740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their unaudited financial
statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized
in the unaudited financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities.
The Company’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes
accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were
The Company may be subject to potential examination by foreign taxing authorities in the area of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with foreign tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
The Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the periods presented.
On August 16, 2022, the U.S. Government enacted legislation commonly referred to as the Inflation Reduction Act. The main provisions of the Inflation Reduction Act (the “IR Act”) that we anticipate may impact us is a 1% excise tax on share repurchases. Any redemption or other repurchase that occurs after December 31, 2022, in connection with a Business Combination, extension vote or otherwise, may be subject to the excise tax. Because there is possibility that the Company may acquire a U.S. domestic corporation or engage in a transaction in which a domestic corporation becomes parent or affiliate to the Company and the Company may become a “covered corporation” as a listed Company on Nasdaq. The management team has evaluated the IR Act as of June 30, 2026 and does not believe it would have a material effect on the Company, and will continue to evaluate its impact.
The Company calculates net income (loss) per share in accordance with ASC Topic 260, “Earnings per Share.” In order to determine the net income (loss) attributable to both the redeemable shares and non-redeemable shares, the Company first considered the undistributed income (loss) allocable to both the redeemable ordinary shares and non-redeemable ordinary shares and the undistributed income (loss) is calculated using the total net income (loss) less any dividends paid. The Company then allocated the undistributed income (loss) ratably based on the weighted average number of shares outstanding between the redeemable and non-redeemable ordinary shares. Any remeasurement of the accretion to the redemption value of the ordinary shares subject to possible redemption was considered to be dividends paid to the public stockholders.
| 12 |
DT CLOUD STAR ACQUISITION CORPORATION
NOTES TO UNAUDITED FINANCIAL STATEMENTS
The calculation of diluted income (loss) per ordinary shares does not consider the effect of the rights issued in connection with the (i) Initial Public Offering, and (ii) the private placement since the exercise of the rights are contingent upon the occurrence of future events. As of June 30, 2026 the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into ordinary shares in the earnings of the Company. As a result, diluted net income (loss) per ordinary share is the same as basic net income (loss) per ordinary share for the period presented.
| For
the Three Months ended June 30, 2026 | For
the Three Months ended June 30, 2025 | |||||||
| Net income | $ | $ | ||||||
| Less: Interest earned in Trust Account to be allocated to redeemable shares | ( | ) | ( | ) | ||||
| Net loss excluding investment income in Trust Account | ( | ) | ( | ) | ||||
| For
the Six Months ended June 30, 2026 | For
the Six Months ended June 30, 2025 | |||||||
| Net income (loss) | $ | ( | ) | $ | ||||
| Less: Interest earned in Trust Account to be allocated to redeemable shares | ( | ) | ( | ) | ||||
| Net loss excluding investment income in Trust Account | ( | ) | ( | ) | ||||
| For the Three Months Ended | For the Three Months Ended | |||||||||||||||
| June 30, 2026 | June 30, 2025 | |||||||||||||||
| Non-Redeemable | Redeemable | Non-Redeemable | Redeemable | |||||||||||||
| Ordinary Share | Ordinary Share | Ordinary Share | Ordinary Share | |||||||||||||
| Basic and diluted net income (loss) per share: | ||||||||||||||||
| Numerators: | ||||||||||||||||
| Allocation of net losses | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Interest earned in Trust Account | ||||||||||||||||
| Allocation of net income (loss) | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
| Denominators: | ||||||||||||||||
| Weighted-average shares outstanding | ||||||||||||||||
| Basic and diluted net income (loss) per share | $ | ) | $ | $ | ) | $ | ||||||||||
| 13 |
DT CLOUD STAR ACQUISITION CORPORATION
NOTES TO UNAUDITED FINANCIAL STATEMENTS
| For the Six Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, 2026 | June 30, 2025 | |||||||||||||||
| Non-Redeemable | Redeemable | Non-Redeemable | Redeemable | |||||||||||||
| Ordinary Share | Ordinary Share | Ordinary Share | Ordinary Share | |||||||||||||
| Basic and diluted net income (loss) per share: | ||||||||||||||||
| Numerators: | ||||||||||||||||
| Allocation of net losses | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Interest earned in Trust Account | ||||||||||||||||
| Allocation of net income (loss) | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
| Denominators: | ||||||||||||||||
| Weighted-average shares outstanding | ||||||||||||||||
| Basic and diluted net income (loss) per share | $ | ) | $ | ) | ||||||||||||
Related Parties
Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence.
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature. Please refer to Note 8.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.
Recent Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, requiring public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as allexisting segment disclosuresand reconciliation requirements in ASC 280 on an interim and annual basis. The Company adopted ASU 2023-07 during the year ended December 31, 2024. See Note 9 Segment and Geographic Information in the accompanying notes to the consolidated financial statements for further detail.
| 14 |
DT CLOUD STAR ACQUISITION CORPORATION
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 3 –INITIAL PUBLIC OFFERING
On
July 26, 2024, pursuant to the Initial Public Offering, the Company sold Public Units, which includes Public Units
upon the full exercise by the underwriter of its over-allotment option, at a purchase price of $ per Public Unit.
All of the public shares sold as part of the Public Units in the Initial Public Offering contain a redemption feature which allows for the redemption of such public shares if there is a shareholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to the Company’s Amended and Restated Memorandum and Articles of Association, or in connection with the Company’s liquidation. In accordance with the SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of the Company require ordinary shares subject to redemption to be classified outside of permanent equity.
The Company’s redeemable ordinary share is subject to SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99. If it is probable that the equity instrument will become redeemable, the Company has the option to either accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or to recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The Company has elected to recognize the changes immediately. The accretion or remeasurement is treated as a deemed dividend (i.e., a reduction to retained earnings, or in absence of retained earnings, additional paid-in capital).
| Gross proceeds from public shares | $ | |||
| Less: | ||||
| Proceeds allocated to public rights | ( | ) | ||
| Allocation of offering costs related to ordinary shares | ( | ) | ||
| Redeem the redeemable ordinary shares held by Shareholder | ( | ) | ||
| Plus: | ||||
| Accretion of carrying value to redemption value | ||||
| Subsequent measurement of ordinary shares subject to possible redemption (Interest earned in Trust Account) | ||||
| Subsequent measurement of ordinary shares subject to possible redemption (additional funding for business combination extension) | ||||
| Ordinary shares subject to possible redemption (plus any interest earned in the Trust Account) |
NOTE 4 – PRIVATE PLACEMENT
Simultaneously
with the closing of the Initial Public Offering, the Company consummated a private placement of Private Placement Units, at a
price of $ per Private Placement Unit.
The Private Placement Units are identical to the Public Units sold in the Initial Public Offering except for certain registration rights and transfer restrictions.
| 15 |
DT CLOUD STAR ACQUISITION CORPORATION
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 5 – RELATED PARTY TRANSACTIONS
Founder Shares
On November 29, 2022, the Company issued an aggregate of founder shares (“Founder Shares”) to the initial shareholders, so that the Sponsor collectively owned % of the Company’s issued and outstanding shares after the Initial Public Offering for an aggregate purchase price of $.
On July 26, 2024, since the underwriter exercised the over-allotment in full, no Founder Shares are subject to forfeiture.
Representative Shares
On July 26, 2024, the Company issued ordinary shares of $ par value each to A.G.P/Alliance Global Partners (“A.G.P.”) (hereafter – the Representative Shares), at the closing of the IPO as part of representative compensation. The shares were accounted for as of July 26, 2024, and received by A.G.P.
Private Placement
On
July 26, 2024, the Company consummated the sale of Private Placement Units at a price of $ per Private Placement Unit in
a private placement to the Sponsor, generating gross proceeds of $
Promissory Note — Related Party
On
December 31, 2023, the Company issued an unsecured promissory note to the Sponsor, pursuant to which the Company may borrow up to an
aggregate principal amount of $
On
October 28, 2024, the Company issued an unsecured promissory note to the Sponsor, pursuant to which the Company may borrow up to an aggregate
principal amount of $
On
October 22, 2025, the Company entered into an amendment to the Investment Management Trust Agreement (the “Trust Agreement”),
with Wilmington Trust National Association. Pursuant to the Trust Agreement, the Company has the right to extend the time for us to
complete our initial business combination for a period for 12 months from October 26, 2025 to October 26, 2026 by depositing into the
trust account $
As of June 30, 2026 and December 31, 2025, the principal amount due and owing under the Promissory Note were nil, respectively.
Due to Related Party
As
of June 30, 2026 and December 31, 2025, the Company had a temporary advance of $
| 16 |
DT CLOUD STAR ACQUISITION CORPORATION
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Administrative Services Arrangement
An
affiliate of the Sponsor will agree that, commencing from the date that the Company’s securities are first listed on NASDAQ through
the earlier of the Company’s consummation of a Business Combination and its liquidation, to make available to the Company certain
general and administrative services, including office space, administrative and support services, as the Company may require from time
to time. The Company has agreed to pay the affiliate of the Sponsor $
Working Capital Loans
In
order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of
the Company’s directors and officers may, but are not obligated to, loan the Company funds as may be required (“Working Capital
Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds
of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the
Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust
Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans.
Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with
respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest,
or, at the lender’s discretion, up to $
NOTE 6 – SHAREHOLDERS’ DEFICIT
Ordinary shares
The
Company is authorized to issue ordinary shares, with a par value $ per share.
As of June 30, 2026, there were ordinary shares issued and outstanding, excluding ordinary shares subject to possible redemption.
Rights
—
| 17 |
DT CLOUD STAR ACQUISITION CORPORATION
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 7 – COMMITMENTS AND CONTINGENCIES
Registration Rights
Pursuant to a registration rights agreement entered into on July 26, 2024, the holders of the Founder Shares, Private Placement Units (including securities contained therein), and units (including securities contained therein) that may be issued on conversion of working capital loans or extension loans are entitled to registration rights pursuant to a registration rights agreement signed on the effective date of this offering requiring the Company to register such securities for resale. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company’s register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company completion of initial business combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriter Agreement
The
underwriters are entitled to aggregate
The
underwriters are entitled to a cash underwriting discount of
As
of July 26, 2024, the Company paid a cash underwriting commission of
The
underwriters are entitled to a cash underwriting discount of
NOTE 8– FAIR VALUE MEASUREMENTS
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.
“Fair value” is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
| ● | Level 1 - Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. | |
| ● | Level 2 - Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. | |
| ● | Level 3 - Unobservable inputs based on the Company’s assessment of the assumptions that market participants would use in pricing the asset or liability. |
| 18 |
DT CLOUD STAR ACQUISITION CORPORATION
NOTES TO UNAUDITED FINANCIAL STATEMENTS
| Prices in | Other | Other | ||||||||||
| Active | Observable | Unobservable | ||||||||||
| Markets | Inputs | Inputs | ||||||||||
| At June 30, 2026 | (Level 1) | (Level 2) | (Level 3) | |||||||||
| Money Market Funds (cash equivalents) | $ | |||||||||||
| Money Market Funds (marketable securities held in Trust Account) | ||||||||||||
| Prices in | Other | Other | ||||||||||
| Active | Observable | Unobservable | ||||||||||
| Markets | Inputs | Inputs | ||||||||||
| At December 31, 2025 | (Level 1) | (Level 2) | (Level 3) | |||||||||
| Money Market Funds (cash equivalents) | $ | |||||||||||
| Money Market Funds (marketable securities held in Trust Account) | ||||||||||||
Note 9 – Segment reporting
ASC Topic 280, “Segment Reporting,” establishes standards for companies to report in their financial statement information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise that engage in business activities from which it may recognize revenues and incur expenses, and for which separate financial information is available that is regularly evaluated by the Company’s chief operating decision maker (“CODM”), or group, in deciding how to allocate resources and assess performance.
The
Company’s CODM has been identified as the Chief Executive Officer and the Chief Financial Officer, who review the assets, operating
results, and financial metrics for the Company as a whole to make decisions about allocating resources and assessing financial performance.
Accordingly, management has determined that there is only
The CODM assesses performance for the single segment and decides how to allocate resources based on net income (loss) that also is reported on the statement of operations as net income (loss). The measure of segment assets is reported on the balance sheet as total assets.
| For the six months ended | ||||||||
| June 30， | ||||||||
| 2026 | 2025 | |||||||
| Operating expenses: | ||||||||
| Formation and operating costs | $ | ( | ) | $ | ( | ) | ||
| General and administrative expenses | ( | ) | ( | ) | ||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income: | ||||||||
| Interest from operating account | ||||||||
| Interest earned in Trust Account | ||||||||
| Unrealized gain on marketable securities held in Trust Account | ||||||||
| Total other income | ||||||||
| Net (Loss) Income | $ | ( | ) | $ | ||||
The key measures of segment profit or loss reviewed by the CODM are formation and operational costs. Formation and operational costs are reviewed and monitored by the CODM to manage and forecast cash to ensure enough capital is available to complete the Business Combination within the Combination Period. The CODM also reviews formation and operational costs to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and budget. Formation and operational costs, as reported on the statement of operations, are the significant segment expenses provided to the CODM on a regular basis.
All other segment items included in net income are reported on the consolidated statement of operations and described within their respective disclosures.
Note 10 – Subsequent Events
Management has evaluated subsequent events through the date of issuance of these condensed consolidated financial statements. On July 27, 2026, the Company received notification from The Nasdaq Stock Market LLC (“Nasdaq”) that its application to transfer the listing of its ordinary shares, units and rights from the Nasdaq Global Market to the Nasdaq Capital Market had been approved, effective as of the opening of trading on July 29, 2026. As a result of this transfer, the Company’s securities remain listed on Nasdaq and are subject to the continued listing requirements of the Nasdaq Capital Market. The trading symbols for the Company’s securities remain unchanged as “DTSQ,” “DTSQU” and “DTSQR.” In accordance with ASC 855, Subsequent Events, management has determined that this listing transfer constitutes a non-financial subsequent event that does not require adjustment to the condensed consolidated financial statements as of and for the quarter ended June 30, 2026, as it pertains to the listing tier of the Company’s securities rather than to the financial position or results of operations as of that date. However, disclosure of this event is provided to inform readers of the Company’s current capital markets status. No other subsequent events have occurred that would require recognition or disclosure in these financial statements.
| 19 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
References in this quarterly report on Form 10-Q (the “Quarterly Report”) to “we,” “us” or the “Company” refer to DT Cloud Star Acquisition Corporation. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to DT Cloud Star Management Limited. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s final prospectus for its initial public offering filed with the SEC. The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
We are a blank check company incorporated in the Cayman Islands on November 29, 2022 as an exempted company with limited liability. We were formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities, which we refer to as a “target business.” We are an emerging growth company and, as such, we are subject to all of the risks associated with emerging growth companies.
On July 26, 2024, we consummated the initial public offering of 6,900,000 units (“Units”), which includes the exercise in full by the underwriters of their over-allotment option to purchase up to an additional 900,000 Units on July 25, 2024. Each Unit consists of one ordinary share, par value $0.0001 per share (“Ordinary Share”), and one right (“Right”) to receive one-ninth (1/9) of one Ordinary Share upon the consummation of an initial business combination. The Units were sold at an offering price of $10.00 per Unit, generating gross proceeds of $69,000,000. A.G.P./Alliance Global Partners (“A.G.P.”) served as the representative of the underwriters of our initial public offering.
Simultaneously with the closing of our initial public offering on July 26, 2024, we consummated the private placement with DT Cloud Star Management Limited, the sponsor (“Sponsor”), of 206,900 private units at a price of $10.00 per private unit, generating total gross proceeds of $2,069,000. As of July 26, 2024, a total of $69,000,000 of the net proceeds from our initial public offering were deposited in a trust account established for the benefit of our public stockholders, with Wilmington Trust National Association acting as trustee.
Our Units started to be listed on The Nasdaq Global Market (the “Nasdaq”) and began trading under the ticker symbol “DTSQU” on July 25, 2024. On September 12, 2024, we announced that the holders of the Units may elect to separately trade the underlying component securities of the Units commencing on September 16, 2024. Those Units not separated continue to trade on Nasdaq under the symbol “DTSQU,” and each of the Ordinary Shares and Rights that have been separated trade on Nasdaq under the symbols “DTSQ” and “DTSQR,” respectively.
Our efforts to identify a prospective target business will not be limited to a particular industry or geographic location. Our management team is actively seeking out potential opportunities to pursue a business combination. Completion of an initial business combination is subject to, among other things, the negotiation and execution of a definitive agreement providing for the transaction, satisfaction of the closing conditions included therein and approval of the transaction by our shareholders. Accordingly, there can be no assurance that a definitive agreement will be entered into or that the proposed transaction will be consummated in the near term. Nevertheless, we are confident that we will be able to find a target business that will meet expectations. We intend to capitalize on the strengths and experiences of our management team to select, acquire and form a business combination that has a competitive advantage in their core business and is positioned to bring in high returns and long-term sustainable growth.
We initially have 15 months from the closing of our initial public offering to consummate our initial business combination. On October 22, 2025, we entered into an amendment to the Investment Management Trust Agreement (the “Trust Agreement”), with Wilmington Trust National Association. Pursuant to the Trust Agreement, we have the right to extend the time for us to complete our initial business combination for a period for 12 months from October 26, 2025 to October 26, 2026 by depositing into the trust account $75,000 for all remaining public shares for each one-month extension.
| 20 |
Liquidity and Capital Resources
On July 26, 2024, we consummated the initial public offering of 6,900,000 Units, which includes the exercise in full by the underwriters of their over-allotment option to purchase up to an additional 900,000 Units on July 25, 2024. The Units were sold at an offering price of $10.00 per Unit, generating gross proceeds of $69,000,000. Simultaneously with the closing of our initial public offering on July 26, 2024, we consummated the private placement with the Sponsor of 206,900 private units at a price of $10.00 per private unit, generating total gross proceeds of $2,069,000.
Following our initial public offering and the private placement, a total of $69,000,000 of the net proceeds were deposited in the trust account. We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account (excluding deferred underwriting commissions and less taxes payable) to complete our initial business combination. We may withdraw interest from the trust account to pay our taxes. To the extent that our equity or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies. We intend to use the funds held outside the trust account primarily for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the business combination.
For the six months ended June 30, 2026, cash used in operating activities was $120, primarily due to the Company’s operating expenditures, which offset payments made by the sponsor during the period. As of June 30, 2026, we had cash at bank of $341.
On June 30, 2026, the Company had working capital deficit of $980,611, excluding deferred underwriting commissions and the available cash held in the Trust Account for marketable securities, which indicated a lack of liquidity it needed to sustain operations for a reasonable period of time, which was considered to be one year from the issuance of the financial statements.
In order to fund working capital deficiencies or finance transaction costs in connection with an initial business combination, our sponsor, officers, directors, or their affiliates may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we will repay such loaned amounts. In the event that the initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts, but no proceeds from our trust account would be used for such repayment.
On October 28, 2024, we issued an unsecured promissory note to the sponsor, pursuant to which we may borrow up to an aggregate principal amount of $300,000 (the “Promissory Note”). The Promissory Note is non-interest-bearing and payable on the consummation of the initial business combination or converted upon consummation of the business combination into additional private units at a price of $10.00 per unit. On July 29, 2025, we entered into a Letter Agreement to the Working Capital Loan Note (the “Letter Agreement”) with the sponsor, pursuant to which we and the sponsor agreed to terminate the Working Capital Loan Note and confirmed that the outstanding amount that we borrowed under the Promissory Note was $nil.
On February 2, 2026, we entered into a Business Combination Agreement (the “BCA”) with PrimeGen US, Inc. and certain other parties, pursuant to which we intend to consummate our initial business combination through a series of merger transactions. Management believes that the consummation of the proposed business combination, if completed, would provide us with an operating business and additional capital resources. However, the completion of the proposed business combination is subject to customary closing conditions, including regulatory approvals and shareholder approval, and there can be no assurance that the transaction will be consummated. Accordingly, the matters described above do not alleviate the substantial doubt about our ability to continue as a going concern.
Additionally, during the shareholder meeting, a total of 5,247,491 shares of common stock were tendered for redemption. This redemption of public shares resulted in a significant reduction in the number of outstanding public shares and has impacted the Company’s available liquidity. Management is actively managing the Company’s cash resources to ensure that sufficient funds are available to meet the minimum cash condition required to consummate the business combination.
The redemption of public shares, together with the extension of the business combination deadline, provides the Company with additional time to pursue suitable acquisition targets. However, the redemption activity has reduced the amount of cash available outside of the Trust Account, and any further redemptions could further impact the Company’s liquidity position and its ability to consummate the business combination. To support its ongoing liquidity needs and fund operating and transaction-related expenses, the Company plans to issue additional promissory notes to the Sponsor or its affiliates, subject to mutually agreed terms. The Company will continue to closely monitor its liquidity position and take appropriate actions to ensure that it maintains sufficient capital resources to complete the business combination.
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Results of Operations
We have neither engaged in any operations nor generated any revenue to date. Our entire activity since inception through June 30, 2026 related to our formation, the preparation for the initial public offering, and since the closing of the initial public offering, the search for a prospective initial business combination. We do not expect to generate any operating revenues until the closing and completion of our initial business combination, at the earliest. We will generate non-operating income in the form of interest income from the amount held in the trust account. We expect that we will incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses in connection with search for, and completing, a business combination.
For the six months ended June 30, 2026, we had net loss of $74,754, which consisted of operating costs of $394,383, offset by interest earned on marketable securities held in the operating account and Trust Account of $319,629. For the six months ended June 30, 2025, we had net income of $1,261,782, which consisted of operating costs of $223,570, offset by interest and dividends earned on marketable securities held in the operating account and Trust Account of $1,485,352.
Contractual Obligations
Registration Rights
Pursuant to a registration rights agreement entered into on July 24, 2024, the holders of the insider shares, private placement units (including securities contained therein), and units (including securities contained therein) that may be issued on conversion of working capital loans are entitled to certain customary registration rights for the resale of such securities. The holders of these securities are entitled to make requests for no more than two demand registrations, excluding short form demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our completion of initial business combination and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. We will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The underwriters are entitled to a cash underwriting commission of 2.5% of the gross proceeds of the initial public offering upon the closing of the initial business combination, including (1) $0.15 per unit, or $1,035,000 in the aggregate, payable to the underwriters in cash upon the consummation of the initial public offering, and (2) $0.10 per unit, or $690,000 in the aggregate, for deferred underwriting commissions that will be placed in the trust account as described in the final prospectus related to the initial public offering and payable to the underwriters in cash upon the consummation of the initial business combination. In addition, we agreed to issue 69,000 ordinary shares (the “Representative Shares”) to Alliance Global Partners (“A.G.P.”) upon the consummation of the initial public offering as part of the underwriting compensation in connection with the offering. On July 26, 2024 we issued 69,000 Representative Shares to A.G.P. at the closing of our initial public offering, which have been received by A.G.P.
Administrative Services Agreement
On July 24, 2024, we entered into an agreement with the Sponsor, pursuant to which we agreed to pay the Sponsor a total of $10,000 per month for secretarial and administrative support services provided to us through the earlier of consummation of the initial business combination and our liquidation.
In addition, our Sponsor, officers and directors, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.
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Critical Accounting Policies and Estimates
The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the periods reported. Actual results could materially differ from those estimates. A critical accounting estimate to our unaudited financial statements includes the valuation of ordinary shares subject to possible redemption.
Recent Accounting Pronouncements
Our management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s unaudited financial statements.
Off-Balance Sheet Arrangements
As of June 30, 2026, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.
Subsequent Events
Subsequent to the quarter ended June 30, 2026, on July 29, 2026, the Company completed the transfer of its listed securities from the Nasdaq Global Market to the Nasdaq Capital Market, following Nasdaq’s approval received on July 27, 2026. This transfer was initiated to address previously reported deficiencies in the Company’s compliance with the Global Market continued listing standards and has successfully restored the Company’s compliance at the Capital Market tier, which imposes lower quantitative thresholds for stockholders’ equity, market value of publicly held shares, and minimum bid price. While this transfer has resolved the immediate risk of delisting, management cautions that there can be no assurance that the Company will be able to maintain compliance with the Capital Market’s ongoing listing requirements in the future. A future delisting from Nasdaq, if it were to occur, would materially reduce the trading liquidity of the Company’s ordinary shares, units and rights, and would adversely affect their market prices, as well as potentially impair the Company’s access to capital markets. Management intends to continue monitoring the Company’s key financial metrics against the Capital Market continued listing standards and will evaluate available remedial measures, if necessary. However, there is no guarantee that any such measures would be successful or that the Company would avoid future non-compliance. This listing transfer does not have any direct impact on the Company’s reported results of operations, cash flows, or financial position for the quarter ended June 30, 2026.
JOBS Act
We qualify as an “emerging growth company” under the JOBS Act and are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We elected to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
As an “emerging growth company”, we are not required to, among other things, (1) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (2) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (3) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (4) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our initial public offering or until we are no longer an “emerging growth company,” whichever is earlier.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
This item is not applicable as we are a smaller reporting company.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial and accounting officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of June 30, 2026, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal financial officer have concluded that during the period covered by this Quarterly Report, our disclosure controls and procedures were effective as of June 30, 2026.
Changes in Internal Control Over Financial Reporting
During the most recently completed fiscal quarter, there has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us or any of our officers or directors in their corporate capacity.
ITEM 1A. RISK FACTORS
We may not be able to maintain compliance with Nasdaq listing requirements.
On January 15, 2026, we were notified by the Listing Qualifications Staff of The Nasdaq Stock Market LLC (“Nasdaq”) that based on our Market Value of Listed Securities (“MVLS”) for the period from November 21, 2025 to January 6, 2026, we no longer met the continued listing requirement under Nasdaq Listing Rule 5450(b)(2)(A) to maintain a minimum MVLS of $50,000,000. On April 6, 2026, we were notified by Nasdaq that we did not comply with the minimum 400 total shareholders requirement for continued inclusion under Nasdaq Listing Rule 5450(a)(2). Based on the review of materials we submitted on May 29, 2026, Nasdaq granted our request for an extension until October 5, 2026 to regain compliance with this requirement. On July 15, 2026, we received written notice from the Listing Qualifications Department of Nasdaq stating that Nasdaq had determined to delist our securities due to our failure to regain compliance with Nasdaq Listing Rules. Unless we requested an appeal by July 22, 2026, trading of our securities would be suspended at the opening of business on July 24, 2026, and a Form 25-NSE would be filed with the SEC to remove our securities from listing and registration on Nasdaq. We timely submitted a hearing request, which stayed the suspension. On July 27, 2026, we received notice that Nasdaq approved the transfer of the listing of our ordinary shares, units and rights from the Nasdaq Global Market to the Nasdaq Capital Market, effective at the opening of trading on July 29, 2026. As a result of this transfer, we regained compliance with Nasdaq listing requirements. Our securities continue to trade under the symbols “DTSQ,” “DTSQU” and “DTSQR,” respectively. However, there can be no assurance that we will be able to maintain compliance with Nasdaq listing requirements in the future. Any delisting from Nasdaq would materially reduce stock liquidity and adversely affect the market price of our securities.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Unregistered Sales of Equity Securities
In November 2022, March 2023 and January 2024, an aggregate of 1,725,000 insider shares were issued to our initial shareholders, for an aggregate purchase price of $25,000, or approximately $0.014 per share. The insider shares held by our initial shareholders included an aggregate of up to 225,000 shares subject to forfeiture by our sponsor to the extent that the underwriters’ over-allotment option was not exercised in full or in part, so that our initial shareholders would collectively own 20.0% of our issued and outstanding shares after our initial public offering (excluding the sale of the private units and the issuance of representative shares and assuming our initial shareholders did not purchase units in our initial public offering). On July 25, 2024, the underwriters exercised their over-allotment option in full.
Simultaneously with the closing of our initial public offering on July 26, 2024, we consummated the private placement with the Sponsor of 206,900 private units at a price of $10.00 per private unit. This issuance was made pursuant to Section 4(a)(2) of the Securities Act, as the transaction did not involve a public offering. No underwriting discounts or commissions were paid with respect to the private placement.
Use of Proceeds
On July 26, 2024, we consummated the initial public offering of 6,900,000 Units, which includes the exercise in full by the underwriters of their over-allotment option to purchase up to an additional 900,000 Units on July 25, 2024. The Units were sold at an offering price of $10.00 per Unit, generating gross proceeds of $69,000,000. Simultaneously with the closing of our initial public offering on July 26, 2024, we consummated the private placement with the Sponsor of 206,900 private units at a price of $10.00 per private unit, generating total gross proceeds of $2,069,000.
As of July 26, 2024, a total of $69,000,000 of the net proceeds from our initial public offering was deposited in a trust account established for the benefit of our public stockholders, with Wilmington Trust National Association acting as trustee.
The securities sold in our initial public offering were registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-278982) (the “Registration Statement”). The SEC declared the Registration Statement effective on July 24, 2024.
There has been no material change in the planned use of proceeds from our initial public offering and the private placement as described in our Prospectus.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
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ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
| * | Filed herewith |
| ** | Furnished herewith |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: August 3, 2026 | DT Cloud Star Acquisition Corporation | |
| By: | /s/ Sam Zheng Sun | |
| Name: | Sam Zheng Sun | |
| Title: | Chief Executive Officer and Director (Principal Executive Officer) | |
| By: | /s/ Kenneth Lam | |
| Name: | Kenneth Lam | |
| Title: | Chief Financial Officer and Director (Principal Financial and Accounting Officer) | |
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